Colony Bankcorp Keeps First Reliance Name in $163 Million Deal

Colony Bankcorp has the last big yes it needed from bank regulators for its $163 million buy of First Reliance Bancshares, and shareholders of both companies vote on October 14, 2026.

If they approve, Colony aims to close on November 1, 2026 and walk into South Carolina as a four-state lender with about $5 billion in assets, while leaving the First Reliance name on the doors.

Colony Parks a $5 Billion Bank Under the Durbin Line

The June 24, 2026 merger agreement is easy to file under “another Southeast tuck-in.” Fitzgerald, Georgia-based Colony already had Alabama, Florida, and Georgia. Florence-based First Reliance gives it a tenth of a billion in South Carolina loans and a path to about $5 billion in assets, $4 billion in deposits, and $3.2 billion in loans.

The more lasting change sits one rung up the size chart. Colony’s own merger slides say the combination creates the largest sub-$10 billion bank in Georgia or South Carolina. That is a peer-set claim, not a national ranking, and it is the point of the check.

Banks under $10 billion in assets still collect market-rate debit interchange instead of the Durbin Amendment cap that hits larger issuers. They also sit below the line where the Federal Reserve treats a shop as a regional bank. A $5 billion franchise can hire, lend, and buy again without stepping on that tripwire. Colony is not leaping over $10 billion. It is parking just under it, with a South Carolina deposit base attached.

Heath Fountain, Colony’s chief executive, told analysts the Southeast’s community-bank consolidation has left a gap between small local shops and large regionals. “By bringing Colony and First Reliance together, we are filling that void and establishing an institution that is large enough to handle major lending needs, but local enough to remain focused on our customer relationships,” he said on the June 25, 2026 call.

First Reliance Holders Can Take Cash or Colony Stock

Each First Reliance share can be turned in for $19.75 in cash or 0.94 of a Colony share. Proration is built so about 20 percent of the stock is paid in cash and 80 percent in Colony shares. Colony holders keep about 77 percent of the combined company; First Reliance holders hold about 23 percent.

At Colony’s $20.71 close used in the June deck, that mix priced First Reliance at $19.52 a share, or 162 percent of tangible book, 11.7 times estimated 2027 earnings, and 6.8 times those earnings after modeled cost saves. The core deposit premium was 8.5 percent. Colony stock last changed hands at $20.45 on October 2, 2026.

THE DEAL COLONY PUT ON THE TABLE

Derek Shelnutt, Colony’s chief financial officer, said the bank modeled cost saves of about 35 percent of First Reliance’s projected 2028 noninterest expense of $37.6 million, with 60 percent of those saves in 2027 and the rest after that. Revenue synergies were identified and not put in the model. Pre-tax merger costs are $16.0 million, taken through tangible book at close, at a 21 percent tax rate.

Credit work was heavier than a slide. Colony assigned a $9.0 million pre-tax gross credit mark, 1.05 percent of the loan book, and a $22 million interest-rate fair value mark, 2.64 percent of gross loans. Shelnutt said the team reviewed 77 percent of the commercial real estate portfolio and every non-mortgage loan over $725,000. Modeled 2027 return on assets moves from a 1.15 percent consensus to 1.35 percent once the saves are in.

South Carolina Branches Keep the First Reliance Name

The legal target disappears. First Reliance Bancshares merges into Colony Bankcorp, then First Reliance Bank merges into Colony Bank. What does not disappear is the name customers already know. The companies said First Reliance locations in South Carolina will continue operating under the First Reliance brand.

That is a different choice than Colony made with TC Federal Bank, the $86.1 million Georgia-Florida deal it closed on December 1, 2025. TC Federal customers were told signs and systems would convert to Colony Bank. First Reliance is being bought as a local face, not sanded off.

Rick Saunders founded the Florence bank in 1999 and still runs it. On the joint call he said the culture was the reason he picked Colony.

This partnership allows us to preserve our cherished culture while gaining the operational scale required to compete at the highest level.

Rick Saunders, Founder and Chief Executive Officer, First Reliance Bancshares

The deck counts 10 South Carolina branches in five markets, with Florence still the weight of the franchise. Deposit figures below are the company’s own mix as of June 30, 2025.

WHERE FIRST RELIANCE TAKES DEPOSITS

Those offices sit in large local pools. Colony’s slides put Columbia metro deposits at about $27 billion, Greenville at about $26 billion, Charleston at about $23 billion, Myrtle Beach at about $12 billion, and Florence at about $4 billion. First Reliance’s community-bank share is meaningful only in Florence, at 9.11 percent and a third-place rank among community banks. Everywhere else it is a small door into a growing market, which is what Colony is paying for.

By June 30, 2026, First Reliance reported $1.13 billion in assets, $820.7 million in loans, and $920.3 million in deposits. Tangible book was $12.38 a share, up $1.67, or 15.6 percent, from a year earlier. Nonperforming assets had fallen to $626,000, or 0.06 percent of assets, after a large problem loan paid off. Net interest margin was 3.74 percent. The company’s own quarter showed a tangible book value of $12.38 a share against a cash takeout at $19.75.

Saunders Moves From Founder-CEO to Executive Vice Chairman

Colony is not buying the deposits and sending the Florence officers home. Saunders joins Colony as executive vice chairman, a director, and a member of the executive team. The rest of the operating bench stays in South Carolina or moves into group jobs.

WHO STAYS FROM FLORENCE

• Rick Saunders: Executive vice chairman of Colony, board member, and executive-team member.
• Justin Strickland: Colony’s president for South Carolina, from First Reliance president.
• Robert Haile: Chief investment officer and treasurer, from First Reliance chief financial officer.
• Brook Moore: Colony credit officer for South Carolina, from First Reliance chief credit officer.
• Chuck Stuart: Co-president of Colony Mortgage, from head of the First Reliance mortgage shop.
• Rick Redden: Joins the Colony board; Chairman Dr. Dale Lusk keeps an advisory seat with board observation rights.

Fountain used the mortgage piece as a working example, not a slogan. First Reliance runs a high-volume production model; Colony wants to fold its retail originators into that shop and keep specialized products. Haile, who will run investments and the treasury, told the call that First Reliance had held deposit costs below peers through the rate cycle and that the combined book could “compete with larger regional players while preserving our customer-focused service model.”

Keefe, Bruyette & Woods, a Stifel company, advised Colony, with Alston & Bird as counsel. Hovde Group advised First Reliance, with Ward and Smith as counsel.

Fitzgerald Has Been Buying Its Way Across the Southeast

Colony Bank opened in Fitzgerald in 1975. The holding company listed on Nasdaq in 1998 and moved to the New York Stock Exchange in 2024. The current run of deals is shorter than the 50-year story. The June deck cites three completed purchases in seven years. The latest of those was TC Bancshares, parent of TC Federal, agreed at about $86.1 million in July 2025 and closed on December 1, 2025.

After that close Colony reported year-end 2025 assets of $3.74 billion, loans of $2.38 billion, and deposits of $3.07 billion. It counted 53 offices in the First Reliance slides, against First Reliance’s 10. The map already included Birmingham, Tallahassee, Jacksonville, the Florida Panhandle, and a thick Georgia branch net. South Carolina was the missing coastal state.

Fountain has been chief executive since 2018. R. Dallis Copeland Jr. is president of the bank subsidiary. The holding company’s investor site still tells First Reliance customers there are no immediate changes to customer accounts, cards, loans, or branches because of the announcement. Legal combination is aimed at the fourth quarter of 2026. The system cutover is aimed at the second quarter of 2027.

Cost Cuts Hit in 2027, After the Legal Close

All required regulatory approvals came in on September 17, 2026. What is left is the shareholder vote and ordinary closing conditions, including tax treatment as a reorganization under Section 368(a). The joint proxy sets special meetings on October 14, 2026 at 1:00 p.m. Colony’s meeting is virtual. First Reliance meets in person at the First Reliance Bank Learning Center, 2148 West Palmetto Street, Florence.

The companies then point to November 1, 2026 as the close date, with the customer conversion a half year later. That lag is where the 35 percent expense cut has to be taken without emptying the branches whose name Colony just paid to keep. Sixty percent of the modeled saves are slated for 2027, which is also when the cores are supposed to merge.

THE PATH TO A FOUR-STATE BANK

1. June 24, 2026: Colony and First Reliance sign the merger agreement and post the investor deck.
2. September 17, 2026: Both companies say all regulatory approvals are in hand.
3. October 14, 2026: Shareholders of Colony and First Reliance vote.
4. November 1, 2026: Targeted legal close, if the votes land and remaining conditions are met.
5. Second quarter 2027: Planned systems conversion and customer integration.

Little public argument has formed around the multiple. Filing accounts restated the approvals and the vote date; they did not pick apart 162 percent of book. The live question is narrower. Can Colony take 35 percent out of a $37.6 million expense base and still run a bank whose South Carolina doors still say First Reliance after the 2027 conversion?

A Four-State Bank Tries to Fill a Service Gap

Saunders told analysts that for South Carolina customers “this means continuity,” backed by Colony’s products and a larger balance sheet. Fountain’s version is that the combined shop can take loans the remaining independents cannot, without becoming another regional that treats the Pee Dee and the Upstate as a dot on a map.

That is the wager inside the $163 million price. Colony already showed, with TC Federal, that it will put its own name on a purchased bank when it wants a single brand. It is doing the other thing here: buy the scale, stay under $10 billion, and leave the Florence sign up. Shareholders decide on October 14, 2026 whether that split is worth locking in.

Disclaimer: This article is news reporting and analysis of a pending bank merger and is for information only. It is not investment advice, a solicitation to buy or sell Colony Bankcorp or First Reliance Bancshares securities, or a recommendation on how to vote at either special meeting. Readers should consult a licensed financial adviser or the joint proxy statement before acting on the deal terms, the cash-or-stock election, or either stock. Deal values, close dates, cost-save estimates, and capital ratios are taken from company materials as published and can change with the vote, the close, and later results.